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Next Up: Wall Street Reform

In Britain, the police are
raiding Hedge Funds to bust insider traders. In America, the Hedge Funds
are still raiding us, even as public opinion calls for a crackdown on
Wall Street. One recent poll, in a nation that seems so divided on
everything,
showed 82% for aggressive action. 82%!

A new Bloomberg survey says
the public wants the government to punish the financial fraudsters.
"57 percent of Americans have a mostly unfavorable or very unfavorable
view of Wall Street, versus fewer than one-quarter who have a favorable
opinion. Banks are viewed badly by 54 percent of poll respondents, and
60 percent have a negative opinion of insurance companies."

In a sense, reformers have
won the fight of public opinion, but the financial reform battle
promises
to be even tougher than the health care fight.

Why?

The public is just not as
informed
about complicated financial issues. Their eyes glaze over with all the
talk of derivatives and credit default swaps. Those favoring needed
reforms still don't offer a popularly understood narrative based on
morality as well as insider economic analysis. Few commentators outside
the business press are talking about it.

The Banks do understand the
scale of the problem and the depths of anger by their customers. As
a result, they are upping their touchy-feeling TV ads and fielding
the biggest army of lobbyists in history to confuse, complicate, contain
and, where possible cancel proposed reforms. It was reported that there
were 6-8 lobbyists for each Member of Congress working against health
care reform. On bank reform issues, it's 25-1. Banks have the money
and target it on politicians as a prudent investment to foster a climate
that will allow them to make even more.

So far, the coalition for
financial
reform is not as large or organized as the movements championing health
care reform. The AFL-CIO has resorted to guerilla theater, not guerilla
warfare, a la the Tea Partiers. Most informed observers, to quote a
Bidenism, know this issue is the real big Fuck'in deal.

Even as more financial scandals
surface, there is far too little follow up, not to mention
investigations
and denunciations. One report on Sify.com reveals, "since the financial
crisis erupted in 2008, the FBI's 1,000-agent New York office has
tripled
its mortgage fraud investigations squad and beefed up its securities
and financial fraud group.

"The FBI's Internet Crime
Complaint Center says it received 336,655 fraud complaints last year
related to financial losses of $560 million, double the dollar amount
reported the year before."

Progressives don't seem to
appreciate the scale of this problem or how it could be turned into
THE issue to organize around. In contrast, the right just wants
to ignore it because it believes the private sector can do no wrong.

Recently, documents surfaced
from the Lehman bankruptcy showing how that company cooked the books
along with many others in the industry. But, what's being done about
it, asks former New York Governor Eliot Spitzer and Josh Rosner, the
managing director of an independent financial services research firm,
writing:

"It doesn't take a rocket
scientist - and certainly not an accountant - to deduce one thing
from the Lehman scandal. The misleading of regulators, investors and
the public did not happen in isolation. Like Enron, WorldCom, Tyco,
Wachovia, Washington Mutual, Fannie/Freddie, CDOs, Bear, AIG, bond
insurers,
GM, Chrysler, CIT, California, Greece and the countless others wrapped
up in this crisis, Lehman is "symptomatic of a banking system bent
on finding ways to hide risk from the investing public and regulatory
community."

It should be clear to all that
a deeper examination of the relationship between all the audit firms
and their clients on the issue of risk-obfuscation is needed. Limiting
any inquiry to Lehman alone is inadequate."

The cost of inaction is likely
to be more big bank failures and more meltdowns. Don't take
my word for it. Lehman's new chief is among those making scary warnings
as Ed Harrison of Credit Writedowns explains:

"Lehman head Brian Marsal
warned that Wall Street had not learned its lesson in the credit crisis
and that another megabank bankruptcy was likely. Marsal made the remarks
while in Berlin for a bankruptcy conference in an interview with German
business daily Handelsblatt:

"Handelsblatt: you are
handling the largest bankruptcy in human history. Can anything like
this happen again?

"Bryan Marsal: It is even
likely that a case of Lehman will repeat itself. In any case, as long
as nothing fundamental changes in financial regulation and in financial
institutions. Wall Street has not really learned a lot from the
situation.
There is still much too much leverage in the market, and credit default
swaps remain completely unregulated. Even with regulators and in the
companies little has been done after the global catastrophe."

Underline that: "LITTLE HAS
BEEN DONE."

The situation is bad and
getting
worse. The Wall Street Journal reported recently on its front page about
woes in the banking sector, noting banks are experiencing the biggest
full year decline in 67 years.

Just two factoids to put in
your don't bank on the banks file:

- 16 year high of 702 banks
at risk, according to the FDIC

- highest level of loans at
least three months past due ever recorded

So far the government response
has been less than forceful when it comes to the underlying frauds---no
serious Pecora type investigation accompanied by some talk of beefing
up white collar crime task forces but with few prosecutions so far.
President Obama has mentioned this but not yet made it an issue. It
seems to have become a ‘ho-hummer.'

Our fearless media is also
downplaying this diaster because they don't have a first class, high
profile villain like Bernie Madoff to use to personalize the problem.

In other words, it's shady
business as usual with more businesses going out of business. And
alongside
this failure is a growing meltdown for what used to be the middle class
and working class.

Quite reasonably, the public
is becoming angrier because jobs are not coming back. And quiet as it
is kept, they may not be coming back.

Writes Mark Zandi, "The job
losses over the past three years have been across a wide range of
industries
and from coast to coast. And if you've lost your job, in all likelihood
you will remain unemployed for longer than in any period since the Great
Depression."

Explains Eric Janzen of
iTulip.com,
"The cumulative and lasting damage caused by two consecutive,
predictable
and thus preventable asset bubbles is starting to dawn on their victims.
Some call it the "new normal." Millions of Americans have not recovered
the income or job status they enjoyed a decade ago.'

This is not an abstraction.
Just this morning, a man hustled me for a quarter as I was leaving the
subway. As I reached into my pocket, he had a change of mind. "Forget
it man," he said. "I don't need no quarter. I need a job." It
was as if he was talking to himself.

No jobs, seething unrest and
a slo-go approach to reform are a toxic mix. I feel like a broken record
hoping growing outrage will finally turn into action. People feel
robbed because they are being robbed. They are losing jobs, homes and
hope. Many are beaten down but others are slowly rising up.

It's one thing to feel good
fulminating against a love affair with Capitalism. It's another to
realize that's all we got, and so we must, once again, try to
drive the corrupt money changers and banksters out of the system

For progressives who protested
on health care, isn't it time to engage the real pain in our economy?
Has ignoring the crime of our time also become "the new normal?"

This is the world we live in. This is the world we cover.

Because of people like you, another world is possible. There are many battles to be won, but we will battle them together—all of us. Common Dreams is not your normal news site. We don't survive on clicks. We don't want advertising dollars. We want the world to be a better place. But we can't do it alone. It doesn't work that way. We need you. If you can help today—because every gift of every size matters—please do.

News Dissector Danny Schechter edits Mediachannel.org and blogs at news dissector.net. His latest book is Madiba A to Z: The Many Faces of Nelson Mandela (Madibabook.com) Comments to dissector@mediachannel.org

Further

To those who consider Trump a reptilian shape-shifter, mazel tov: Now he officially is one. Thanks to a species-naming auction for Rainforest Trust, a small, blind, worm-like, newly discovered amphibian who buries its head in the ground will be named Dermophis donaldtrumpi. The name, says its creator, is "perfect" for the new caecilian, from the Latin for "blind...perfectly mirroring the strategic vision (Trump) has consistently shown towards climate change.”

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